The United States is seeing a disturbingly inequitable economic recovery. One survey found that more than a quarter (27 percent) of minority-owned small businesses remained closed, compared to 18 percent of other small businesses. Meanwhile, the unemployment rate for Black Americans increased to 8.8 percent in August, nearly double the 4.5 percent unemployment rate for white Americans.
These outcomes are rooted in long-standing disparities, like unequal access to capital and collateral. White-owned startups are still seven times more likely to obtain loans than Black-owned startups during their founding year. Throughout the pandemic, businesses owned by people of color did not receive equitable access to federal aid through the Paycheck Protection Program (PPP), despite being hit harder economically.
The Minority Business Development Agency (MBDA) could provide a lifeline for these small businesses and help build a more equitable economy. To do so, it needs an expanded budget and permanent federal funding.